Interconnect Usage Charge: What Is It & How It Affects You

Interconnect Usage Charge: What Is It & How It Affects You

Tech and Auto

Ever since VoLTE or data calling became a huge hit on the Jio network, Vodafone and Airtel loyalists have had a sudden change of heart and have embraced Jio data voice calling.

On 19 September, TRAI dropped yet another bomb on incumbent telecom operators like Airtel, Vodafone and Idea Cellular by slashing the Interconnect Usage Charge (IUC) on wireless to wireless devices by 57 percent to just 6 paisa per minute. TRAI also said there will be no more IUC post 2020.

IUC is the fee which various telecom service providers (TSP) pay each other while connecting calls from one operator to another.

For example, say you have an Airtel connection and you call a friend who happens to have a Vodafone connection.

Vodafone’s network is used to route the call to your friend. Therefore, Vodafone will charge Airtel in such a case.

The cut in IUC has left incumbents in absolute disarray and according to them this move by TRAI will lead to huge losses.

Where Bharti Airtel could lose around Rs 2,000 crore per annum, Vodafone India and Idea Cellular could take a Rs 1,500 and Rs 1,200 crore hit respectively.

The Cellular Operators Authority of India (COAI) has slammed the move by saying the means of determining IUC are not transparent and unfair.

Reliance Jio seems to be making merry of this move as this helps their cause. Jio have always been against IUC and also suggested earlier that it should be completely removed. The cut means they will save up to Rs 5,000 crore.

Since there is no IUC on data calls, Jio is pushing the VoLTE technology more and more and this forces the other telecom operators to move to VoLTE as well.

This battle is going to get ugly in the coming days but what works in our favour is that call rates might get cheaper in the coming days.

Video Editor: Prashant Chauhan

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